02 December, 2002, DAR ES SALAAM, Tanzania: South African Airways (SAA) and Air Tanzania began a new era today when they formalized a partnership in which the South African national carrier will acquire a 49% stake in the East African carrier.
The signing ceremony was attended by officials from the Tanzanian and South African governments, who own the two airlines, as well as André Viljoen, President and Chief Executive Officer of South African Airways.
In the new company, Air Tanzania Company Limited (ATCL), the government of Tanzania holds 51% and SAA the remaining 49 % .
Of the $20-million transaction, $10-million will go into the 49% share-holding and the other $10-million towards the capital and training account earmarked for the capitalisation of ATCL.
Viljoen told guests that the partnership offers potential for the growth of both parties. “I would like to welcome Air Tanzania to the SAA family. Karibu! This partnership does not only offer opportunities for growth, but also for establishing a strong and reliable presence in East Africa.
“Opportunities for South African Airways to develop in Africa are substantial.
“We are extending our wings to cover the African sky and other regions of the world in line with continuing our expansion policy and strategy of Networking Africa.
“The purchase of a stake in ATCL forms part of the strategy, where we strive towards connecting our existing strong hub in Southern Africa with that of East and West Africa. This initiative is closely aligned to the objectives of the New Partnership for Africa’s Development (Nepad),” he said.
John C. Rubambe, Executive Chairman of the Presidential Parastatal Sector Reform Commission said: “The Tanzanian government appreciates SAA`s interest and commitment to this new partnership. It provides excellent opportunities for growth through the airline`s extensive training and technical support facilities.”
SAA will send an interim management team to ATCL to help set up the infrastructure for the new airline. For an initial period, SAA will manage the new airline while suitable candidates to manage the new company are being sought.
The process of privatising Air Tanzania Corporation (ATC) was facilitated by the Presidential Parastatal Sector Reform Commission (PPSRC), the body responsible for the privatisation of parastatals in Tanzania.